The agency, which will keep the Rocket name, will have a staff of 21.
It will be headed by Mark Girling (pictured, left), the head of PHD Compass, who takes on the role of managing director. Mark Sherwood (right), the former head of Rocket, becomes the executive planning director. Rocket will have billings of £51 million and clients including Mini, Butlins, BT, Living TV and Toshiba.
Lunar, the creative joint venture with Abbott Mead Vickers BBDO that launched last month, will sit within the new agency. Media buying will go through Omnicom's trading company, OPera.
PHD Compass offices outside London will be branded PHD North.
Girling commented: "We're bringing together very talented people to deliver not just great thinking and creativity but also discipline and rigour through the whole process."